A farmer in Guiguinto, Bulacan planted 50 mango trees on his property wh ow fruit bearing. For the mangoes produced for the next 5 years, the farmer w ed the following by two wholesale buyers: Buyer A offered a down payment of P50,000 and P1,000 for the produce fr each tree each year to be paid at the end of each of the 5 years. Buyer B will not pay any downpayment, but will pay P1,200 for the produ from each tree each year to be paid at the beginning of each year for 5 year ney is worth 12% effective, which of the offers should the farmer accept?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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A farmer in Guiguinto, Bulacan planted 50 mango trees on his property which
are now fruit bearing. For the mangoes produced for the next 5 years, the farmer was
offered the following by two wholesale buyers:
Buyer A offered a down payment of P50,000 and P1,000 for the produce from
each tree each year to be paid at the end of each of the 5 years.
Buyer B will not pay any downpayment, but will pay P1,200 for the produce
from each tree each year to be paid at the beginning of each year for 5 years.
If money is worth 12% effective, which of the offers should the farmer accept?
Transcribed Image Text:A farmer in Guiguinto, Bulacan planted 50 mango trees on his property which are now fruit bearing. For the mangoes produced for the next 5 years, the farmer was offered the following by two wholesale buyers: Buyer A offered a down payment of P50,000 and P1,000 for the produce from each tree each year to be paid at the end of each of the 5 years. Buyer B will not pay any downpayment, but will pay P1,200 for the produce from each tree each year to be paid at the beginning of each year for 5 years. If money is worth 12% effective, which of the offers should the farmer accept?
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